SACO — George Coburn recently put his house on the market.
Faced with property tax bills that have more than doubled since he built the house himself 14 years ago – he now pays $6,406 a year – Coburn sees no other option but to move. It’s a situation he hopes other seniors could avoid if the Saco City Council approves a new tax deferral plan.
“I love this house, I love the area, but I can’t afford to pay the taxes,” Coburn, 72, said as he sat in his sunny kitchen. “I wanted to stay here until I die.”
Saco’s city councilors will consider a proposal Monday to become one of the first Maine communities to allow seniors to defer payments on their property tax bills until they die or sell their homes. The program is allowed under a state law passed in 2009 that was designed to give qualifying seniors a way to stay in their homes, but it has been adopted in only a couple of towns.
Wells became the first town to offer the program in 2010. Winthrop followed a year later.
Rep. Kathleen Chase, R-Wells, who sponsored the bill, pushed for the program after seeing senior citizens struggle to keep up with taxes on the homes they had owned for decades. A former tax assessor in Wells, she said it was heartbreaking to see elderly residents stressed over how to pay the bill.
“These are people who would pay their bill if they could. They don’t want a free ride, but they don’t want to worry about losing their homes,” she said. “This allows a pathway for people in that situation to have a means to stay in their homes. If it saves one couple or one person, it’s wonderful. That’s what it’s meant to do.”
To qualify, residents have to be 70 or older, have lived in their homes for more than 10 years and have incomes no higher than 300 percent of the federal poverty level. Their property taxes would be deferred until their deaths or the sale of their homes, then paid back to the city with interest.
While Chase and others say there is a clear and growing need, the programs themselves have spread slowly and drawn little participation, something attributed to the strict qualifications and to a reluctance by many elders to ask for assistance.
Wells has not had a resident qualify and few inquire about it, according to town officials. Winthrop has had one participant.
Winthrop Town Manager Jeffrey Woolston said the town wanted to provide an “option that can be offered to seniors who have owned their homes forever, have contributed to society and need help. … The help ought to be available at the local level.”
Despite the low participation level, Chase sees it as an important safety net for seniors. She also believes the program could gain traction as the state deals with issues that come with an aging population.
Maine’s median age – 43.5 years – is the highest in the nation, in part because of a dwindling younger population, according to the U.S. Census. The state’s proportion of people age 65 and older – 17 percent – is second only to Florida’s 18.2 percent.
By 2030, more than 25 percent of Mainers will be 65 or older, magnifying existing shortages in transportation, housing, health care, long-term care and elder services. The Portland Press Herald/Maine Sunday Telegram is examining aging issues in an ongoing series, “The Challenge of Our Age.”
Those trends are mirrored in Saco, where the median age is 41.9 years. About 13 percent of the city’s nearly 19,000 residents – 2,436 people – are 65 or older, according to the census. The median age in York County is 43.
Mayor Don Pilon was well aware of the property tax deferral program before being elected last year. As a state representative, he co-sponsored the bill and supported its passage. He said he introduced the proposal in Saco after talking to senior citizens about the difficulty of living on fixed incomes in a coastal community where taxes have increased dramatically in the past decade, including an 18 percent tax hike in one year.
“These are people who have worked in the community, have participated in making Saco what it is and who are living on fixed incomes,” Pilon said. “They’re very concerned about what bill to pay. Do they pay their oil bill or their car payment? Do they pay for their prescriptions or pay their taxes? When they finish paying for everything, there’s nothing left.”
Although Pilon is enthusiastic about the program and sees it as a necessary tool to help some of the city’s most vulnerable citizens, others in Saco question whether it’s the right fit for the city.
The public reaction to the proposed program was mixed at an April 28 public hearing. About a half-dozen seniors encouraged the council to adopt the program, but several people criticized the idea because it targets a narrow segment of the population.
Maureen Clark, a 77-year-old widow who has lived in Saco for 45 years, said she pays two mortgages and a home equity loan with income from Social Security and a small pension. Standing before the City Council, she held up a real estate ad for a $1.2 million Kennebunkport home that listed the property taxes as $3,800 annually. She said she pays more than $7,600 in taxes each year on a small cape that sits on less than two acres near a river.
Clark already participates in a separate city program that Saco created years ago to help seniors keep up with tax bills. The program allows her to volunteer 100 hours to earn a $750 credit toward her tax bill – the equivalent of $7.50 an hour. In the past, she also has gotten a tax abatement and had help from her son, but that’s no longer an option, she said.
“This year I’m at the end of my rope. I don’t have anything else to borrow,” Clark said. “This is extremely important if I want to stay in my home.”
Beth Johnston, a school board member, said it is obvious that the economy is taking its toll on Saco residents, but she doesn’t think the city should help people just based on their age.
“It seems to be what we’re talking about is a special-interest group,” she said. “It just seems to me this is the wrong tool. … I believe everyone who is suffering needs some assistance from the city.”
OTHER HELP IN PLACE
Some Saco city councilors seem reluctant to enact the new program, largely because the city already has options available to help residents who need help with their tax bills.
“It’s not as good as what we currently do,” said Councilor Eric Cote. “We don’t take houses from people who have nowhere to go. We don’t kick people out of their homes when they have a problem like that.”
The city finance department works “very hard” to get people into gradual payment plans when they are struggling with their property taxes, said finance director Cheryl Fournier. She works with residents individually to set up payment schedules.
“People can make monthly payments on their taxes, but at least they’re making headway toward paying it off,” Fournier said. “We want to work with homeowners to allow them to stay in their home.”
Saco’s five-year-old program allowing seniors to volunteer in exchange for tax relief shows there is a need. Thirty seniors each year have volunteered 100 hours to earn the $750 credit. This year the program will expand to include up to 40 residents. The volunteers work in various city departments based on their skills, such as tending city parks or flower gardens. Many participants are greeters at the train station.
Councilor Arthur Tardif said he has mixed feelings about the proposed deferral program. He worries it could create uncertainty in the budget process if the city doesn’t know how many seniors may apply for the program and how much would be lost in tax revenue that year.
Councilor Nathan Johnston said he believes the program would do more harm than good. He said it is too restrictive regarding age and years of residency, but not restrictive enough in other areas because people qualify based on income, not assets and other revenue.
He is also concerned about the amount of interest that would be charged under the deferment program. The city would collect back taxes, plus 8 percent. The city collects 7.5 percent interest on delinquent taxes.
“While this program does keep seniors in their homes, it’s passing the expense on to the next generation, many of which are struggling to stay in their own homes,” he said.
FORCED TO SELL, LEAVE STATE
When Coburn, the man who is selling his home, hears arguments against the program, he shakes his head in frustration. He doesn’t believe most of the city councilors understand the pressures facing seniors who are living on fixed incomes and are unable to work.
Coburn is a frequent volunteer at the Saco Food Pantry, where he has become accustomed to seeing his peers come in for help. The number increases each time property taxes go up, he said.
“I see a lot of the old folks coming in for food,” he said. “They’re embarrassed because they’ve worked all their lives.”
Coburn, who lives with Theresa, his wife of 47 years, said he is keenly aware of how similar their circumstances are to those he sees at the food pantry. When he retired from Cyro Industries in Sanford, he thought his retirement savings would last until he was 80.
But when his wife got cancer, they found themselves buried in medical bills that quickly drained their savings. Coburn builds furniture to supplement their income and pay their property taxes, but that’s becoming harder for him to do as he ages.
Three years ago – around the same time she was diagnosed with cancer – the Coburns saw a $1,100 jump in their tax bill. The next year, it rose another $600. They are now billed $6,406 a year in property taxes, more than double what they paid when they first built the house.
They owe $5,481 in back taxes.
“I’m scared because I don’t want the city taking my house,” Coburn said. “I can think of nothing more shameful than losing your home to the city.”
If the City Council approves the program, it will be too late for the Coburns. They’ve already decided to move. But they would like to see it put in place so other seniors could stay in the homes they love.
For now, the Coburns are keeping their fingers crossed that their house sells quickly so they can settle their tax bill and move to Florida.
“I’ll burn my tires getting out of Maine,” Coburn said.
Gillian Graham can be contacted at 791-6315 or at: